Since the beginning of November, U.S. gasoline demand has softened. The Energy Information Administration’s (EIA) data shows demand measured at 8.7 million b/d for the week ending Nov. 6. In their latest report, for the week ending Dec. 4, demand measured at 7.6 million b/d. That is the lowest reading since the end of May and marks four weeks of straight decline.
“Gasoline demand is down 14% year-over-year. The numbers we are seeing as of late are very similar to readings from May when many states were locked down and demand was very low,” said Jeanette Casselano McGee, AAA spokesperson. “The fact is, Americans are filling-up less as states re-introduce travel restrictions and the pandemic lingers.”
With softer gasoline demand, many states are seeing pump prices push cheaper, though at modest rates. Motorists are not seeing larger declines at the pump likely due to crude oil prices, which continue to trend around $46/bbl (WTI). However, crude prices have not pushed above this price point.
Regardless, amid low gasoline demand, high gasoline inventory and a resurgence in coronavirus cases, gas prices are not likely to see large increases. On the week, the national gas price average held steady at $2.16. That is also four cents less than last month and 40 cents cheaper than last year.
- The nation’s top 10 largest monthly changes: Florida (+14 cents), Delaware (+11 cents), Washington, D.C. (+10 cents), New Jersey (+10 cents), Utah (-10 cents), Maryland (+9 cents), Iowa (+8 cents), Arkansas (+7 cents), Missouri (+7 cents) and Oklahoma (+7 cents).
- The nation’s top 10 least expensive markets: Mississippi ($1.84), Missouri ($1.84), Texas ($1.85), Louisiana ($1.87), Oklahoma ($1.88), Arkansas ($1.90), Tennessee ($1.91), South Carolina ($1.91), Alabama ($1.91) and Kansas ($1.94).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by 21 cents to settle at $46.57. Although crude prices ended with a loss for the day, due to market concerns that demand may dwindle in the coming winter months, prices increased slightly over the previous week amid continued market optimism that demand will recover in 2021 as Americans begin receiving coronavirus vaccines this week. More positive news about Americans receiving the emergency coronavirus vaccine will likely continue to bolster the domestic price of crude oil this week.